Type I diabetes and its complications is a tremendous cost to the health care system. Implementing islet transplantation to enable patients to regain physiological control of their blood glucose levels faces two major obstacles: lack of human donor pancreases and graft rejection. Use of animal cells or tissues and immunosuppression could ameliorate these problems, but introduce additional problems, particularly chronic administration of toxic immunosuppressive agents. Sertoli Technologies, Inc. is developing a diabetes cellular therapy and product based on Sertoli cell and islet xenografts that provides limited and localized, not systemic, immunosuppression and enhanced growth of engrafted tissue. The proposed development systematically builds on our initial experience with our chosen Sertoli cell and islet source, establishes quality criteria for the cells, demonstrates the efficacy of the therapy in chemically-induced and autoimmune diabetic rodents, explores immunosuppression options, transplant sites and the effect of pretolerization and estimates a cell dose-response relationship. These data will establish our commercial product, satisfy regulatory concerns and enable future safety and efficacy studies in higher animals as a prelude to initiation of xenotransplantation in type I diabetic patients.